The pair heads into London trade near the top of its 0.8154/0.8192 Asian range as risk on sentiment dominates trade. Sources see Aussie topping out at around 0.8220/30, while bids from shorts reportedly at 0.8170. Sources see Aussie/Yen higher, with Fibonacci resistance seen at the 98.30 area as Dollar/yen stays bid. Other sources note that that repatriation flows have been dominant into year-end with chatter of central bank buying of Aussie bonds in recent days. Overall the market is in a downtrend. However the market could see a short-squeeze higher as Switzerland’s move to negative rates and anticipation for the ECB to follow suit soon could see capital flight from Europe looking for a shelter from negative rates. Aussie/Swiss sees resistance at the 0.8064 level, while Euro/Aussie support initially seen at 1.4921.
